In order to reduce the effects of the economic slow down, some politicians are turning to monetary policy or the Central Bank. They believe that by printing more money there will be more wealth, more investment and more employment.
When a Central Bank, such as the US Federal Reserve (FED) or the European Central Bank, increases the amount of money in circulation it is done by reducing interest rates. This excess liquidity is channeled firstly towards the financial system, causing an excess in credit which forces the financial institutions to reduce or relax credit requirements for its clients in order to reduce its monetary reserves caused by the excess liquidity that was created by the Central Bank policy of "easy money". Nonetheless, this "easy money" policy cannot be maintained because printing more money can NEVER generate greater wealth. All excess liquidity eventually translates into a "bubble", or a increase in the rate of inflation, or both.
Caribbean-Central American Action (CCAA) is a private, independent organization that promotes private sector-led economic development in the Caribbean Basin and throughout the Hemisphere.
Operates in Panama, Nicaragua, Honduras, Guatemala, El Salvador, Costa Rica and Caribbean Community
Phone: (202) 331-9467
Expeditors, a publicly owned company, provides logistics solutions that touch on all aspects of the supply chain. For 30 years, Expeditors employees have worked diligently with our customers to increase order visibility, reduce surplus inventory, control inflated delivery-cycle times, monitor and assign accountability and reduce overall supply chain costs.
Operates in Costa Rica, El Salvador, Guatemala, Nicaragua, Honduras and Panama
Phone: (506 ) 2437 4747 - (506) 2430 0327